Boost Profitability And Efficiency
With Mathematical Optimization

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FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

Overview
Overview

Overview

Situation

Higher returns, less risk, messy data, big decisions. That’s thelife of financial services analysts. They must find the signal in
the noise and formulate strategies for maximizing returns andminimizing risks.

Challenges
Opportunity

These high-level analyses require superior tools forevaluating strategies and, most importantly, determining
the precise decision-making elements that lead to compliant,risk-adjusted returns. As a result, leading financial services
firms are turning to next-generation AI technologies suchas mathematical optimization and machine learning. These
technologies provide analysts with better predictive powerand decision-making insights.

Conclusion

Gurobi commissioned a custom study from Forrester
Consulting to understand how decision-makers — specificallythose involved with assets, operations, and portfolio risk
management — are using optimization technologies today.

FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

2Key Findings

Fifty-four percent of decision-makers
consider optimization to be critical totheir financial services organization.

Seventy-seven percent are implementing
or expanding their optimization
technologies — with 61% investing in two
or more areas of optimization.

Decision-makers report that mathematicaloptimization helps them achieve greater
profitability, a competitive advantage, andoperational efficiency.

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

Overview

Financial Services Organizations
Prioritize Optimization Technology

Current
SituationState Challenges
Situation

Over half of decision-makers indicated that optimizationis critical to their financial services organization andover three-quarters of them are planning, expanding, orupgrading their optimization technology implementations.

3Optimizations And Optimization
Technologies Are Top of Mind

54%agreed or strongly agreed
that “optimization is criticalto [their] business”

Financial firms recognize that optimization tools can givethem a competitive edge in making business decisions,so time is of the essence.

Opportunity

What are your company’s plans when it comes tooptimization technologies?

Conclusion

Implemented, not expanding or upgrading

Expanding or upgrading implementation

Planning to implement in the next 12 months
Decreasing or removing
FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Base: 162 global decision makers of optimization technology in the financial services industry
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

27%
22%
50%
1%

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

Overview
SituationSituation

Firms Are Applying
MathematicalOptimization More
Frequently And For
More Use Cases

4

Financial services organizations use mathematical optimization to answer complex businessquestions. When given a specific business problem, analysts can use data analysis tools togather insights and then employ machine learning to predict the next trend. But it’s mathematicaloptimization that can then provide quantitative recommendations for the best course of action andinform business decisions.1 Having the right mathematical optimization insights can mean better
decisioning accuracy, efficacy, scale, and speed.

Challenges

As a result, over half of financial services organizations plan to increase their use of mathematicaloptimization — both in the number and variety of use cases — in the next few years.

Opportunity

How do you expect thenumber of use cases
using mathematicaloptimization to change?

Conclusion

Stay the same
Significantly increase
Increase

22%

9%

35%

Within the next 12 months

33%

25%

28%

In a year or more

FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

52% Expect to use

mathematical optimizationto tackle more use cases.
Base: 162 global decision makers of optimization technology in the financial services industry
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

5Overview

Unleashing The Power of Combined
Analytical Tools Requires Care

Situation
Challenges
Challenges

Mathematical optimization can be a differentiator when added to thedecisioning toolbox because combining multiple advanced analyticalcapabilities can maximize all levers at an analyst’s disposal. While 46%of respondents want to combine mathematical optimization
with other advanced analytical technologies, nearly
all respondents (98%) face at least one challenge
doing so.

Opportunity

To overcome many of these challenges, firms must
start by asking the right questions: What are wetrying to find out? Do we have the data we need?
How will we measure whether we’re achieving ourobjectives?

Conclusion

After completing this exploratory process, firms
can then follow up with their tools to make sure they
are capturing as much value from their data as possible.

What are the challenges that your organization
faces with combining mathematical optimization
with other advanced analytics technologies for
optimization projects?

26% We struggle with too much market information.
23% There are privacy concerns aroundsome of the data we use.
22% Our market information is changing
too quickly.
22% We don’t have the right skill set.
20% It doesn’t fit our process.
20% We have insufficient compute power.
18% Accessing the right data is too difficult.
18% We don’t have the right data for themodels we want to run.

FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Base: 162 global decision makers of optimization technology in the financial services industry
Note: Top eight responses shown
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATIONOverview

Mathematical Models Must Change
At The Speed Of Business

Situation

Every business decision affects the decisions that follow it. It’s
therefore important to consider all of an option’s factors before
moving forward.

Challenges
Challenges

With mathematical optimization, decision-makers can explore
a possible decision’s impact by simply tweaking and re-runningtheir mathematical models. This enables them to adjust theirstrategies frequently and to keep up with the ever-changing
business landscape.

Opportunity

Forty-five percent of respondents want to assess and adjust
their strategies more frequently, knowing that this approachenables them to reduce operating costs, respond quickly tomarket changes, manage risk, and achieve greater efficiency.

6What are the benefits to assessing and adjusting
your optimization strategy frequently?
40%

Ability to reduce operating costs
37%

Ability to respond to market changes
36%

Ability to manage risk
33%

Ability to achieve greater efficiency
31%

Conclusion

Ability to accommodate new, internally developed
approaches (e.g. new/changing constraints)
30%

Ability to achieve new revenue growth
FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Base: 162 global decision makers of optimization technology in the financial services industry
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

Overview
Situation

Top Benefits
Include Greater
Profitability,Efficiency, And
Competitive
Advantage

7

Whether adopting mathematical optimization alone or combining it with other analytical capabilities,
respondents expect to achieve multiple benefits when using optimization — with greater profitability being
the top benefit.
Respondents expect to gain a competitive advantage and improved customer experience (CX) when using
mathematical optimization. When combining mathematical optimization with other analytics technologies,
they expect internal business benefits like greater operational efficiency and reduced risk.

Challenges
Opportunity
Opportunity

What benefits has your business achieved or expect
to achieve using mathematical optimization for
optimization projects?

What benefits has your business achieved or expect
to achieve combining mathematical optimization withadvanced analytical technologies for optimization projects?

Conclusion

25%

Greater profitability

27%

Greater profitability

25%

Competitive advantage

24%

Greater operational efficiency

24%

Improved customer service

23%

Minimized risk

24%

Increased processing speed

22%

Increased processing speed

FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Base: 162 global decision makers of optimization technology in the financial services industry
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

Overview

Decision-Makers Are Investing
In People And Technology

Situation
Challenges

Financial services firms are quickly taking steps to invest inoptimization projects, with 70% investing either in mathematicaloptimization technology or in using machine learning withmathematical optimization technologies. Over 60% are investing in
two or more initiatives for optimization projects.

Opportunity
Opportunity

But acquiring technology is not enough. That’s why 64% of
respondents are investing in people with mathematical optimization
expertise — whether hiring and training employees in-house orreaching out to a consulting firm.
By turning to mathematical optimization and leaning on optimization
experts, financial services firms can embrace the complexity ofrunning a modern business and, ultimately, maximize profits while
minimizing risk and maintaining compliance.

8What areas you are investing in for youroptimization projects?
42% Using other technologies such asmachine learning in conjunction withmathematical optimization technologies

40% Investing in new mathematicaloptimization technologies

37% Hiring/training employees withmathematical optimization expertise

36% Engaging a consulting firm tohelp implement/use mathematicaloptimization technologies

Conclusion

23% Finding new use cases formathematical optimization

FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022Base: 162 global decision makers of optimization technology in the financial services industry
Source: A commissioned study conducted by Forrester Consulting on behalf of Gurobi, August 2021

BOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

9Overview

Conclusion

Situation
Challenges

Optimization techniques, technologies, and tools have always been
an essential part of the analyst’s toolbox. The substantial opportunity
afforded by combining data analysis technologies is driving adoptionof optimization. By using mathematical optimization together withmachine learning and industry- and instrument-specific analytics,
analysts can optimize and quickly change business strategies.
This enables business leaders to automate their decision-making
processes.

Opportunity

Leading financial services firms are creating dynamic,
multidisciplinary teams that incorporate mathematical optimization
techniques, technologies, and tools to achieve higher, risk-adjusted
returns. With the right attention and preparation, financial services
firms can modernize and tap into a competitive advantage thatplaces them ahead of the pack.

Conclusion
Conclusion
FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Project Director:
Sandy Liang,
Market Impact Consultant
Contributing Research:
Forrester’s Application Development
And Delivery Research GroupBOOST PROFITABILITY AND EFFICIENCY WITH MATHEMATICAL OPTIMIZATION

10Overview

Methodology

Situation

This Opportunity Snapshot was commissioned by Gurobi. To create thisprofile, Forrester Consulting supplemented this research with custom survey
questions asked of 162 global decisionmakers of optimization technology.
The custom survey began and was completed in August 2021.

Demographics
REIGON

TITLE

Challenges

North America

67%

C-level

40%EMEA

33%

Vice president

26%

Director

25%

Manager

9%

FINANCIAL SERVICES ROLEENDNOTES
Source: “Introducing AI-Powered, Human-Controlled Digital Decisioning Platforms,” Forrester
Research, Inc., August 11, 2020.
1Opportunity

ABOUT FORRESTER CONSULTING

Conclusion
Conclusion

Forrester Consulting provides independent and objective research-based consulting to help leaders
succeed in their organizations. Ranging in scope from a short strategy session to custom projects,
Forrester’s Consulting services connect you directly with research analysts who apply expert insight
to your specific business challenges. For more information, visit forrester.com/consulting.
© Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited.
Information is based on best available resources. Opinions reflect judgment at the time and are
subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total
Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of
their respective companies. For additional information, go to forrester.com. [E-52003]
FORRESTER OPPORTUNITY SNAPSHOT: A CUSTOM STUDY COMMISSIONED BY GUROBI | JANUARY 2022

Insurance30%Fintech

26%

AREAS OF INVOLVEMENT

Commercial banking

20%

Asset management

59%

Wealth and asset
management

17%

Operations
management

42%

Hedge funds

7%

Portfolio risk
management17%

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